Outside Audit Recommends Improvements to HISD Contracting Practices

A third-party audit of the Houston Independent School District’s contracting practices has found HISD’s conflict-of-interest policies are more stringent than those used by most other school systems, although there are several potential areas for improving business practices.

The HISD Board of Education requested the audit as part of an ongoing effort to ensure that the district is making the best use of taxpayer dollars when deciding which businesses will be awarded contracts with HISD. The findings were presented to the board during an open meeting today by Charles Yaple, a partner with Null-Lairson Certified Public Accountants. The firm conducted its audit by reviewing district purchasing records, and by interviewing HISD staff members, former superintendents, and all nine elected board members.

“Following your existing policies should work very well for you,” Yaple told board members. “We’re recommending that you continue your procurement improvement initiatives.”
Those initiatives, which began in fall 2011, are aimed at addressing problems with HISD’s procurement process to ensure greater transparency and consistency for the public and those who are seeking to do business with HISD.

The auditing firm also said HISD should:
• expand annual board training on existing conflict of interest and related procurement policies affecting board members.
• simplify policies, including internal staff policies related to monitoring board activities and activities of procurement evaluation staff.
• involve the Procurement Department in all purchases in some manner, even those that are being handled in other functional areas.
• require board members to communicate benefits that might be received from existing vendors to the superintendent and evaluate exposing these services to market competition

Melinda Garrett, HISD’s chief financial officer, said work is already under way to improve the way HISD documents its contract-awarding process. Those changes include giving advance notification to those bidding on HISD contracts of exactly how their bids will be evaluated.
Garrett today introduced school board trustees to HISD’s newly hired procurement manager, Christopher Gross. Gross, whose first day on the job is April 2, most recently worked as contract manager for the University of Texas System Supply Chain Alliance.
HISD staff will now take these audit findings, along with the findings of a recent review of HISD’s purchasing practices conducted by the Council of the Great City Schools, and develop more plans for improving the process. Those plans will be presented to the Board of Education for feedback.